Cost to previous owner,in a nutshell means previous owner who actually paid for that asset.
So my question is suppose B is the son of A who acquired an asset by will after death of A.Now,if B dies and his son C acquires the same asset,and sells it,then what will be the cost of asset?
I was thinking it will the be cost at which A acquires but in the act it says:
49. [(1)] Where the capital asset became the property of the assessee
(i) on any distribution of assets on the total or partial partition of a Hindu undivided family;
(ii) under a gift or will;
(iii) (a) by succession, inheritance or devolution , or
[(b) on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before the 1st day of April, 1987, or]
(c) on any distribution of assets on the liquidation of a company, or
(d) under a transfer to a revocable or an irrevocable trust, or
(e) under any such transfer as is referred to in clause (iv) [or clause (v)] [or clause (vi)] [or clause (via)] [or clause (viaa)] [or clause (vica) or [clause (vicb)] of section 47];
[(iv) such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of section 64 at any time after the 31st day of December, 1969,]
the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be.
[Explanation.In this [sub-section] the expression previous owner of the property in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) [or clause (iv)] of this [sub-section].]
So that means cost to A is not applicable here? Please enlighten me,iI am confused.
CAclubindia
